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Four New Developments Leading Canada's Biofuel Revolution

Strong biofuels flight results, advances in algae, new commitments in venture capital and revived interest from the Canadian Navy.

Biofuels are off to a fast start in 2013 in Canada.

Canada’s been known for years as the home of several important technology players – Iogen, for one; but more recently, Greenfield Ethanol has been aiming at cellulosic biofuels, while Ensyn is on the verge of commercializing its drop-in fuels technology, and Enerkem has become globally prominent for its waste-to-biofuels technology. Upstream, companies like Agrisoma have been developing high-value feedstock options.

But when it comes to commercial-scale deployment, its been a tougher task in the north. To date, even the leading Canadian technology players have aimed the majority of their early-stage commercial-scale projects at the US or elsewhere. Capital has been frequently raised as an issue — and development of a residue-based supply chain has been another. Canada’s too cold and dark, say some, for technologies such as algae biofuels.

All the more reason why four new developments are changing perceptions. Let’s look at the news.

“Naval vessels and platforms have traditionally operated by the use of fossil fuels to power many of their systems. Biofuels are environmentally much cleaner than fossil fuels, producing less air pollution and consuming some materials that would otherwise be considered garbage,” said a notice posted by the Canadian federal government on Monday.

“Simply converting fossil fuel powered systems to biofuel-powered systems can be complicated and may become costly from the perspectives of financial, space and maintenance requirements, for example. In order to determine if the costs incurred can be justified, the benefits or efficiencies gained must also be determined.”

2. Government outlines sovereign investments in venture capital.

Yesterday in Ottawa, Canadian PM Stephen Harper announced a new Venture Capital Action Plan to improve access to venture capital financing by high-growth companies so that they have the capital they need to create jobs and growth.

Recognizing the importance of the venture capital industry to Canada’s future productivity growth, Economic Action Plan 2012 announced resources to support Canada’s venture capital industry, including $400 million to help increase private sector investments in early-stage risk capital, and to support the creation of large-scale venture capital funds led by the private sector.

With this in mind, the Venture Capital Action Plan will make available:

• $250 million to establish new, large private sector-led national funds of funds (a funds of funds portfolio consists of investments in several venture capital funds) in partnership with institutional and corporate strategic investors, as well as interested provinces;• Up to $100 million to recapitalize existing large private sector-led funds of funds, in partnership with willing provinces; and,• An aggregate investment of up to $50 million in three to five existing high-performing venture capital funds in Canada.

Perhaps the most intriguing? A partnership announced last month between U.S. Steel Canada, Union Gas and Pond Biofuels to establish a pilot algae biofuels project at a US Steel power plant in Nanticoke, Ontario — piping CO2 from the smokestack to an algae pond, from which algae biofuels will be produced. The stack would also provide process heat that mitigates the effect of cold weather on algae production rates.

But in the near-term, perhaps the most startling news from north of the border are the results that came back this week from the 100%-biofuels test flight conducted in October by National Research Canada — the first civil jet powered by 100 percent unblended biofuel — last October. The Falcon 20 flew on biofuel —created in partnership with Applied Research Associates, Chevron Lummus Global and Agrisoma Bioscience Inc.— at 30 000 feet, similar to regular commercial aircraft altitude.

Information collected in-flight and analyzed by a team of experts revealed an important reduction in aerosol emissions (50 percent) when using biofuel compared to conventional fuel. Furthermore, additional tests performed on a static engine show a significant reduction in particles (up to 25 percent) and in black carbon emissions (up to 49 percent) compared to conventional fuel. These tests also show a comparable engine performance, but an improvement of 1.5 percent in fuel consumption during the steady state operations. The jet’s engines required no modification as the biofuel tested in-flight meets the specifications of petroleum-based fuels.

The bottom line on aviation biofuels performance

The Digest was particularly intrigued because critics in previous (50 percent blend) biofuels flight tests had suggested that previous evidence of improved fuel efficiency seen in biofuels could be entirely due to the absence of aromatics in other aviations biofuels — which also had limited aviation biofuels to a maximum of 50 percent blend rates. In this test, the biofuels contained the necessary aromatics, were used as 100 percent replacement, and still recorded a jump in flight fuel efficiency performance as well as a reduction in emissions.

Aside from cost reduction opportunities, in military aviation there are special benefits that can flow from increased fuel efficiency. First, the possibility of increased aircraft range. Plus, the potential for increased weapons payloads because less fuel is needed and overall aircraft weight is reduced.

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